Congress to scrutinize GM’s corporate culture

Originally published June 16, 2014 at 12:42 pm
Updated June 16, 2014 at 3:16 pm

U.S. Rep. Diana DeGette wants General Motors to explain how it plans to fix what's been described as a lax corporate culture and how the company plans to compensate victims of crashes tied to faulty ignition switches.

U.S. Rep. Diana DeGette wants General Motors to explain how it plans to fix what’s been described as a lax corporate culture and how the company plans to compensate victims of crashes tied to faulty ignition switches.

The Colorado Democrat on Monday outlined questions she’ll pose to new GM CEO Mary Barra during a congressional hearing Wednesday.

DeGette, the ranking member of the House committee investigating GM’s recall of 2.6 million small cars, noted a company-commissioned report released this month that showed “the GM corporate culture was so siloed that they were unable to catch some of the safety problems and get them promptly fixed, even though they continually recurred.”

In addition to any company solutions, DeGette said she wants to know “how is it that GM was able to come up with a culture that led to this sort of practice of sweeping things under the rug.”

GM has linked the ignition switch problem to at least 13 deaths in crashes involving Chevrolet Cobalts and Saturn Ions. Congress and the Justice Department are investigating why GM knew about the switch problem for at least a decade but only started recalling the cars this February.

The report from Anton Valukas, a former federal prosecutor hired by GM, highlighted bad corporate habits, such as the “GM nod” — agreeing on a plan of action but doing nothing.

“And that’s what helps cause an atmosphere that could let something like this happen,” DeGette said. “And so what I want to know is what are they going to do to break this culture.”

DeGette aggressively questioned Barra during the CEO’s first appearance before Congress in April. She held up one of the recalled switches while citing a GM document that said replacements would cost the company just 57 cents apiece.

DeGette said Monday that she also wants more details about any compensation plans from GM. The automaker has hired attorney Kenneth Feinberg to implement a compensation strategy.

Feinberg has handled compensation plans for the victims of the Sept. 11, 2001 terrorist attacks, the BP oil spill in the Gulf of Mexico, and donations to victims of the 2012 movie-theater shooting in suburban Denver.

DeGette said lawmakers also want to figure out how to communicate better with drivers who may have faulty GM vehicles. She noted that despite millions of cars being recalled, only a small percentage have been fixed because the drivers are often the second or third owners and they’re not getting the notices, or they’re ignoring them.